Tax Law Changes In The New York State Budget Act, Part 1

In early spring of 2016, Governor Cuomo of New York signed into law the 2016-2017 Budget Act (S6409C/A9009C) (“Budget Act” or”Act”). This legislation includes amendments to the New York tax reform legislation contained in the 2014-2015 New York State Budget and the New York City tax reform legislation contained in the 2015-2016 New York State Budget. It also contains provisions which affect certain state credits and incentives, and state sales tax provisions. This is the first part of a three-part series summarizing some of the more significant provisions of the Budget Act.

Tax credits and incentives

The following are the significant changes to the New York State tax law related to tax credits and incentives. The Act:

Amends the “Qualified New York Manufacturer Real Property Tax Credit” to indicate that taxpayers principally engaged in the production of goods by farming, agriculture, horticulture, floriculture, viticulture, or commercial fishing may qualify for this tax credit as a lessee of real property, even if the lease is a related party. Prior to the amendments, all qualifying leases must have included an unrelated party.

Amends New York’s “Excelsior Jobs Program” by reducing caps on total credits allocated for this program by New York for tax years 2016-2024, and allowing the issuance of tax credits unallocated as of 2024, when the program is scheduled to expire, for taxable years beginning in 2025 and 2026, taking into consideration various limitations. No such tax credit may be allowed for taxable years beginning on or after January 1, 2027.

Extends New York’s “Credit for Companies Who Provide Transportation to Individuals with Disabilities” to include taxable years beginning before January 1, 2023.

Extends New York’s “Hire-A-Vet Credit” to include taxable years beginning before January 1, 2019.

Increases the funding available for New York’s “Urban Youth Jobs Tax Credit Program” for 2016 and 2017 from the previous $20 million per yer to $50 million per year.

Creates a new tax credit for retention of farm employees available to Article 9-A and Article 22 taxpayers. The credit is applicable to taxable years beginning on or after January 1, 2017, and is initially equal to $250 per eligible retained farm employee. This credit amount per retained job will increase to $600 per eligible retained farm employee in tax years beginning on or after January 1, 2021, and before January 1, 2022.

Extends New York’s “Commercial Production Credit” to include taxable years beginning before January 1, 2019.

In 2016, New Yorkers received over $2 billion from the State in tax breaks or refunds. The most popular credits included the Earned Income Tax Credit, Child and Dependent Care Credit, Empire State Child Credit, Household Credit and College Tuition Credit. However, there are many relatively unknown New York State tax credits that still are important for New York business owners, who must utilize them as much as possible to

An experienced and knowledgeable tax professional may help any individual or business become informed regarding available New York State tax credits that may reduce their taxes. If you are an individual or business in the New York or Tri-State area and have any question about taxes, especially in planning ahead for the next filing season, call THE TAX EXPERTS at the Thorgood Law Firm www.thorgoodlaw.com. For a FREE consultation call 212-490-0704.